I don't think the drug use was an issue at that time, mainly because I believe they were still legal and the side effects were not well known back then. iirc, it wasn't really for another seven, eight years or so that they became illegal and the general public and all really began to know about what effects steroid abuse would bring. it's almost an expected quote now by athletes from the 70's and early 80's "yeah, but I took them when they were legal!"
pretty much everything I've seen and read about the switch says simply that Senior had already given his word to Backlund that he'd win the title. but I agree, I think they should've left it on Graham and run with it.